Margin of SafetyMOS

Margin of safety shows how much sales can fall before the business starts making a loss. It can be expressed in units, in rupees or as a percentage:

• MOS = Actual sales − Break-even sales
• MOS ratio = MOS / Actual sales × 100
• Profit = MOS × P/V ratio, so MOS = Profit / P/V ratio

A large margin of safety indicates a sound business that can withstand falls in demand, price cuts or cost increases. A small margin means even a modest drop in sales can push the business into loss. It can be improved by raising the selling price, cutting variable or fixed costs or increasing sales volume.

For a lender, margin of safety is a simple stress indicator. In project appraisal, a bank compares projected sales with break-even sales to judge the risk that the borrower will be unable to service the loan if conditions worsen.

सुरक्षा सीमाले व्यवसाय नोक्सानीमा जानुअघि बिक्री कति घट्न सक्छ भन्ने देखाउँछ:

• सुरक्षा सीमा = वास्तविक बिक्री − समच्छेद बिक्री
• सुरक्षा सीमा अनुपात = सुरक्षा सीमा / वास्तविक बिक्री × १००
• नाफा = सुरक्षा सीमा × P/V अनुपात

ठूलो सुरक्षा सीमाले माग घट्दा वा लागत बढ्दा पनि धान्न सक्ने बलियो व्यवसाय देखाउँछ। मूल्य बढाएर, लागत घटाएर वा बिक्री बढाएर यसलाई सुधार्न सकिन्छ। बैंकले परियोजना मूल्याङ्कनमा जोखिम सूचकका रूपमा प्रयोग गर्छ।